桑坦德银行披露2026年上半年创纪录利润和效率改善

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Introduction & Market Context
Banco Santander (BME:SAN) presented its first-half 2026 earnings on July 22, 2026, revealing record quarterly and half-year profits driven by broad-based revenue growth and accelerating efficiency gains from its ONE Transformation initiative. The Spanish banking giant reported underlying profit of €7.3 billion for the first six months, up 14% year-over-year in constant currency, while its efficiency ratio improved to 42.8%, a 2.9 percentage point enhancement.
The bank’s shares rose 0.73% in premarket trading to $13.75, near the top of its 52-week range of $8.29 to $14.39, as investors welcomed the strong operational performance despite a modest earnings per share miss versus analyst expectations. The presentation highlighted sustainable profitability improvements across all five global business lines and reaffirmed the bank’s trajectory toward achieving its ambitious 2028 targets.
Record Financial Performance
Santander’s second quarter marked the strongest quarterly profit in the company’s history, as shown in the following performance dashboard:
The bank delivered underlying profit of €3.8 billion in Q2 2026, representing 17% year-over-year growth in reported terms and 15% in constant currency. For the full first half, underlying profit reached €7.3 billion, up 15% year-over-year, supported by 12 million net new customers and robust activity levels across its global footprint.
Key profitability metrics demonstrated significant improvement. The underlying return on tangible equity (RoTE) reached 15.6%, up 0.7 percentage points from the prior year, and approached 16.8% when adjusted to a 13% CET1 ratio. Underlying earnings per share surged 20% year-over-year, while tangible net asset value per share plus dividends per share increased 19%, reflecting disciplined capital allocation and strong shareholder value creation.
The bank’s cost of risk remained well-controlled at 1.15%, up just 2 basis points year-over-year, despite sector-wide pressures in Argentina. Excluding Argentina, the cost of risk improved to 1.07%, demonstrating resilient credit quality in the bank’s core markets.
Revenue Growth Across All Businesses
Santander’s revenue performance reflected the benefits of its diversified business model and customer-centric strategy, as illustrated in the detailed profit and loss statement below:
Total revenue reached €30.8 billion in the first half, up 6% year-over-year in constant currency, with growth contributions from both net interest income and fees. Net interest income rose 6% to €22.7 billion, benefiting from higher volumes and active balance sheet management across most geographies. Net fee income increased 7% to €6.9 billion, driven by transactional banking, foreign exchange services, and wealth management activities.
The revenue growth was particularly notable given the competitive environment in key markets. As shown in the following breakdown of revenue contributions by business segment:
All five global businesses contributed to the top-line expansion. Retail banking added €638 million in revenue growth, Corporate & Investment Banking contributed €654 million (up 16%), Wealth added €168 million (up 9%), Openbank contributed €241 million, and Payments added €112 million (up 17%). More than 95% of total revenue was customer-related, underscoring the bank’s focus on relationship-based banking rather than trading or market-dependent activities.
Net interest margin trends remained supportive, as detailed in the following quarterly analysis:
The group’s net interest margin improved slightly year-over-year to 2.71% in Q2 2026, with particular strength in Retail (up 3 basis points), Openbank (up 10 basis points), and CIB (up 18 basis points). Approximately 90% of group net interest income originated from the Retail and Openbank businesses, providing stability and predictability to earnings.
Efficiency Gains from ONE Transformation
The bank’s ONE Transformation initiative continued to deliver structural cost improvements, driving operating leverage across the organization. As demonstrated in the following efficiency improvement framework:
The efficiency ratio improved from 45.3% in 2025 to 42.8% in H1 2026, placing Santander on track to achieve its target of approximately 36% by 2028. The improvement stemmed from multiple initiatives: ONE Transformation contributed 1.2 percentage points of the gain, with additional benefits from artificial intelligence deployment (0.2 percentage points), Global Tech platform efficiencies (0.4 percentage points), and network business collaboration (0.8 percentage points).
Total operating costs declined 1% year-over-year in constant currency, or 5% in real terms after adjusting for inflation and perimeter effects. The cost reduction was particularly impressive in the Retail and Openbank segments, which together represent approximately 75% of the group’s total costs. In these businesses, costs fell 3% year-over-year, or 7% in real terms, while revenue grew 4%, generating powerful positive operating leverage.
The bank’s focus on sustainable profitability improvements is evident in the following customer and efficiency metrics:
Active customers reached 106 million, up 6 million year-over-year, while total customers grew to 182 million. Critically, fees per active customer increased 3% to €130, even as cost per active customer declined 5% to €253, demonstrating the dual benefit of deeper customer relationships and operational efficiency. Digital adoption accelerated, with 53% of retail customers now served through the Gravity and One App platforms, up from lower levels previously and targeting more than 80% by 2028.
The bank generated €84 million in AI business value during the first half, defined as incremental revenue, cost savings, and lower loan-loss provisions from data and AI initiatives. This figure is on track toward the target of more than €1 billion in cumulative AI value creation from 2025 through 2028.
Business Segment Performance
All five of Santander’s global businesses posted double-digit profit growth, as shown in the comprehensive business performance summary:
Retail & Commercial Banking generated underlying profit of €4.1 billion, up 12% year-over-year, with a RoTE of 17.1%. The business benefited from loan growth of 9% (2% excluding TSB), deposit growth of 13% (6% excluding TSB), and fee income growth of 6%. The efficiency ratio improved 2.9 percentage points to 40.5%, while the cost of risk increased modestly to 1.19%, primarily due to Argentina. Excluding Argentina, the Retail cost of risk improved to 1.07%.
Performance varied by geography, with particularly strong results in Spain, where profit before tax surged 33% on the back of higher net interest income, fees, lower costs, and improved loan-loss provisions. The UK business, including the newly integrated TSB operations, reported profit before tax of €938 million (€858 million excluding TSB), up 28% year-over-year excluding TSB, with a combined RoTE of 10.7% that is expected to reach 16% by 2028 after full realization of at least £400 million in cost synergies.
Openbank, the consumer finance and auto lending business, delivered underlying profit before tax of €1.7 billion, up 15% year-over-year when excluding UK Motor Finance provisions. The business was affected by approximately €200 million in Motor Finance charges and €160 million from the end of electric vehicle fiscal benefits in the United States. Excluding these items, revenue rose 4% and costs declined 3%, demonstrating strong underlying momentum. The operating profitability RoTE reached 17.0% (14.5% including Motor Finance).
Corporate & Investment Banking posted profit of €1.7 billion, up 17% year-over-year, with a RoTE of 20.3%. Revenue surged 16%, driven by strong client activity across Global Banking and Global Markets, particularly in the United States and Latin America. The efficiency ratio improved 3.9 percentage points to 40.8%, reflecting 9 percentage points of positive operating leverage as revenue growth significantly outpaced cost increases.
Wealth Management & Insurance generated profit of €1.1 billion, up 19% year-over-year, with an exceptional RoTE of 56.9%. Assets under management reached a record €581 billion, up 13%, driven by solid commercial activity and market performance. Gross written premiums rose 11%, with double-digit growth in both Life & Pensions and Protection insurance. The efficiency ratio improved to 35.0%, and the EBITDA margin approached best-in-class levels.
Payment Solutions delivered profit of €78 million, up nearly 4x from the prior year, with a RoTE of 32.6%. The business benefited from strong activity growth, with Getnet total payment volume up 10%, processed transactions on Getnet Platforms up 5x, and Ebury active customers up 28%. The EBITDA margin improved 3.8 percentage points to 32.6%, while cost per payment transaction declined 45% year-over-year, demonstrating significant scale benefits.
Capital Generation and Shareholder Returns
Santander’s capital position remained robust, with strong organic generation enabling substantial shareholder distributions while maintaining a comfortable buffer above regulatory requirements. The following chart illustrates the evolution of the CET1 ratio and shareholder value creation:
The Common Equity Tier 1 (CET1) ratio stood at 14.0% at June 30, 2026, up 0.6 percentage points from year-end 2025 and well above the bank’s year-end target range of 12.8-13%. The bank generated 56 basis points of net organic capital in the first half, equivalent to 27 basis points per quarter after accounting for ordinary capital distribution.
The strong capital generation supported an accelerated shareholder return program. With buybacks against 2025 results, approximately 50% of capital from the Poland disposal, and the expected buyback against H1 2026 results (approved by the European Central Bank), Santander expects to have delivered approximately €9 billion of its commitment to distribute at least €10 billion through share buybacks for 2025-26. The ECB approved an additional €1.8 billion share buyback program against the H1 2026 results.
Tangible net asset value per share plus cash dividends per share increased 19% year-over-year to €6.56, comprising €6.32 in tangible book value and €0.24 in cash dividends paid (€0.115 in November 2025 and €0.125 in May 2026). This metric demonstrates the bank’s ability to create shareholder value through both capital appreciation and cash returns.
The bank’s front book return on tangible equity of 21% indicates that new business is being written at highly attractive returns, well above the cost of equity and supporting sustainable value creation over time.
Strategic Progress and 2028 Targets
Santander reaffirmed its trajectory toward achieving all 2026 targets and provided an updated roadmap for its 2028 strategic objectives, as shown in the following comprehensive summary:
For 2026, the bank remains on track across all key metrics. Revenue growth of 5% (excluding TSB) is consistent with the mid-single-digit target, while costs declined 2% (excluding TSB) despite inflationary pressures. The CET1 ratio of 14.0% positions the bank comfortably toward the year-end target of 12.8-13%, even after absorbing the estimated 150 basis point impact from the pending Webster Financial acquisition. Tangible net asset value per share plus cash dividends increased 19%, exceeding the "at least double-digit" target.
The bank’s "Financial North Star" for 2026-28 encompasses four strategic pillars, as illustrated in the following framework:
The 2028 targets include: underlying profit exceeding €20 billion (versus €13.2 billion in 2025), return on tangible equity above 20% (versus 15.2% in 2025), an efficiency ratio of approximately 36% (versus 45.3% in 2025), and a CET1 ratio of approximately 13%. The bank plans to maintain a 50% payout ratio, split approximately evenly between cash dividends and share buybacks, with cash dividends expected to more than double from 2025 levels by 2028.
Customer targets include growing total customers to more than 210 million and active customers to approximately 125 million by 2028, while increasing fees per active customer to approximately €135 and reducing cost per active customer to approximately €220. Digital adoption through the Gravity 2.0 platform is targeted to exceed 80% of retail customers by 2028, up from 53% currently.
The ONE Transformation initiative is expected to deliver cumulative efficiency benefits of approximately 3 percentage points by 2028, with additional contributions from AI deployment (approximately 1 percentage point), Global Tech platform leverage (approximately 2 percentage points), network business collaboration (approximately 1 percentage point), and M&A synergies from TSB and Webster (approximately 2 percentage points).
Challenges and Risk Factors
Despite the strong overall performance, Santander faces several headwinds that management addressed in the presentation. Credit costs remain elevated, with the group cost of risk at 1.15%, above the bank’s medium-term target range of 1.0-1.1%. The increase was primarily driven by sector-wide trends in Argentina, where the cost of risk reached 11.12%, up 603 basis points year-over-year. Excluding Argentina, the group cost of risk improved 2 basis points to 1.07%, reflecting prudent risk management and resilient labor markets in other geographies.
The UK Motor Finance provisions totaling approximately €245 million gross (€194 million net of tax and non-controlling interests) weighed on Openbank’s results, with most of the charge taken in the first quarter. While these provisions are largely behind the bank, the UK market remains highly competitive for both deposits and mortgages, with ongoing margin pressure.
Brazil faces a challenging macroeconomic environment, with slower rate normalization and higher inflation affecting customer behavior. The country posted profit growth of just 5% year-over-year, with revenue essentially flat as insurance fees and gains on financial transactions declined. Management attributed some of the weakness to technology migration costs associated with the merger of Santander Consumer Finance and Open Bank into a single legal entity in Europe.
The TSB integration, while completed from a legal and operational standpoint as of May 1, 2026, has not yet delivered significant synergies in the H1 2026 results. The bank expects to realize at least £400 million in pre-tax run-rate cost synergies by 2028, with the legal merger expected in Q2 2027. Until then, the two banks operate under one holding company but maintain separate operations.
The pending Webster Financial acquisition, subject to regulatory approval, is expected to impact the CET1 ratio by approximately 150 basis points upon completion in the second half of 2026. While the deal is expected to be accretive to returns and generate significant synergies over time, near-term integration execution remains a risk factor.
Regulatory developments, including potential changes to capital requirements and the implementation of Basel III endgame rules, could affect capital ratios and returns. Management noted that while the Danish Compromise approval would not add capital to Santander’s current position, future investments could benefit from the treatment.
Full presentation:
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